What should enterprises pay attention when selecting/ changing audit firms?
In addition to the common advice when evaluating service providers (such as requirements on schedules, experience, resources, service quality, value added ...), enterprises should consider additional specific points of audit services as follows:
- The independence of the audit firm: The enterprise should check to ensure that: (1) the firm providing the independent audit service to the enterprise cannot be, at the same time, the provider of other services because it will impact the independence (for example: internal audit services, consulting services to build business processes, consulting risks, ...); (2) the independent audit service provider cannot be a related / affiliated party with the enterprise;
Although the audit firm can theoretically apply measures to help reduce the risk of affecting its independence, the firm should try to avoid the above cases to ensure maximum quality and reputation of the audit opinion that will be issued in the future.
- Ask for the audit service certificate (annually checked and granted by the Ministry of Finance to ensure that the audit firm is eligible for this service): The enterprise should request the audit firm to provide this annual certificate to ensure that the audit service is valid for each year. Without this certificate, the audit firm will not be authorized to provide the service for the current year.
In the case of audit of public/listed companies, banks, and insurance companies, an other annual certificate from the Ministry of Finance will be required.
- The brand of the audit firm: Enterprises should consider this point carefully if enterprises want to build trust from their business partners and other stakeholders. With a high-ranking brand of the audit firm, business partners and other stakeholders will likely feel more secure about the data and information presented in the report, therefore, more confident in the enterprise 's sincerity.
- Effect of the opening accounting balances: This point is often missed when negotiating the audit contract. Enterprises need to discuss in advance with the audit firm to understand how the audit firm will handle this point in order to anticipate further related issues. In fact, this point would have significant impacts on audit opinions, reporting schedules, and additional costs.